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Benchmark prices ease 2.5% for the week

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Dollar on track for third consecutive week of gains

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Fed policymakers prepare ground for rate-cut pause in 2025

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Sinopec says China's crude imports may peak next year

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Trump warns EU on tariffs if bloc doesn't buy more US oil,

gas

By Arathy Somasekhar

HOUSTON, Dec 20 (Reuters) - Oil prices settled little

changed on Friday as markets weighed Chinese demand and interest

rate-cut expectations after data showed cooling U.S. inflation.

Brent crude futures closed up 6 cents, or 0.08%, at

$72.94 a barrel. U.S. West Texas Intermediate crude futures

rose 8 cents, or 0.12%, at $69.46 per barrel.

Both benchmarks ended the week down about 2.5%.

The U.S. dollar retreated from a two-year high, but was

heading for a third consecutive week of gains, after data showed

cooling U.S. inflation two days after the Federal Reserve cut

interest rates but trimmed its outlook for rate cuts next year.

A weaker dollar makes oil cheaper for holders of other

currencies, while rate cuts could boost oil demand.

Inflation slowed in November, pushing Wall Street's main

indexes higher in volatile trading.

"The fears over the Fed abandoning support for the market

with its interest rate schemes have gone out the window," said

John Kilduff, partner at Again Capital in New York.

"There were concerns around the market about the demand

outlook, especially as it relates to China, and then if we were

going to lose the monetary support from the Fed, it was sort of

a one-two punch," Kilduff added.

Chinese state-owned refiner Sinopec said in its annual

energy outlook on Thursday that China's oil consumption would

peak by 2027, as demand for diesel and gasoline weakens.

OPEC+ needed supply discipline to perk up prices and soothe

jittery market nerves over continuous revisions of its demand

outlook, said Emril Jamil, senior research specialist at LSEG.

OPEC+, the Organization of the Petroleum Exporting Countries

and allied producers, recently cut its growth forecast for 2024

global oil demand for a fifth straight month.

JPMorgan sees the oil market moving from balance in 2024 to

a surplus of 1.2 million barrels per day in 2025, as the bank

forecasts non-OPEC+ supply increasing by 1.8 million barrels per

day in 2025 and OPEC output remaining at current levels.

U.S. President-elect Donald Trump said the European Union

may face tariffs if the bloc does not cut its growing deficit

with the U.S. by making large oil and gas trades with the

world's largest economy.

In a move that could pare supply, G7 countries are

considering ways to tighten the price cap on Russian oil, such

as with an outright ban or by lowering the price threshold,

Bloomberg reported on Thursday.

Russia has circumvented the $60 per barrel cap imposed in

2022 following the invasion of Ukraine through the use of its

"shadow fleet" of ships, which the EU and Britain have targeted

with further sanctions in recent days.

Money managers raised their net long U.S. crude futures and

options positions in the week to Dec. 17, the U.S. Commodity

Futures Trading Commission (CFTC) said on Friday.